Tuesday, December 30, 2008

More soon. . . . .

I promise to post more soon in return for the valuable consideration of you busy people taking time to read what I post and your promise to ask any questions you might have as to the general common law policies.

I am sorry, but I just can't open for comments. I do not have time to moderate them. There is a thread on COTH for liability questions and I have invited all attorneys to chime in on the hypothetical and academic nuances of Torts law and waivers. Don't take my word for it, just come here to learn enough to know what questions to ask to learn more.

Now, in upcoming posts I will be talking about a few more waivers, an example of a waiver I just adore if I get permission to post it and then we will move on to the next topic, which is dual agency and disclosure legislation being proposed in several states and already passed in several others. On that you get to comment all you want by being part of the political process and shaping the laws you want.

Lastly, since this is my blog and its about me and what I think I just want to say I WON!!!! I won 2 really hard and impossible cases this week. They have been ongoing and one might get appealed, but for 1 day I WON I WON I WON and I likey very much.

Did I mention I WON???????

Saturday, December 27, 2008

The VA Waiver



The undersigned (hereinafter referred to as “Participant”), being of legal age or signing in conjunction with a parent or legal guardian if not of legal age, desires to board, handle and ride their horse(s) at Y Farm, Inc. Participant, being fully aware of the risk of injury and hazards inherent in the riding and handling of horses, hereby elects voluntarily to participate in said activities, and does hereby willingly enter into the Release, Waiver & Indemnity Agreement.


Inherent Risks and Assumption of Risk: The undersigned acknowledges there are inherent risks associated with equine activities such as described below, and hereby expressly assumes all risks associated with participating in such activities. The inherent risks include, but are not limited to the propensity of equines to behave in ways such as, running, bucking, biting, kicking, shying, stumbling, rearing, falling or stepping on, that may result in an injury, harm or death to persons on or around them; the unpredictability of equine's reaction to such things as sounds, sudden movement and unfamiliar objects, persons or other animals; certain hazards such as surface and subsurface conditions; collisions with other animals; the limited availability of emergency medical care; and the potential of a participant to act in a negligent manner that may contribute to injury to the participant or others, such as failing to maintain control over the animal or not acting within such participant's ability. Undersigned acknowledges that horses, by their very nature are unpredictable and subject to animal whim, which may include behavior including but not limited to their propensity to kick, bite, shy, buck, stumble, bolt, rear or general unpredictability. Undersigned assumes all risks in connection therewith, and expressly waives any claims for any injury or loss arising there from. Undersigned agrees to abide by and follow Farm's rules and regulations, which shall be posted. Undersigned assumes all risks therefore.
It is expressly agreed by Riders, horse owners and their guests and any parent or guardian whose signature appears on this document that this Release, Waiver and Indemnity Agreement shall be governed and construed as being sufficient to satisfy the assumption of risk and waiver requirements necessary to relieve equine activity sponsors and equine Professionals from liability under the Virginia Equine Activity Liability Act, and that Y Farm, Inc. and its officers and owners are covered by the provisions of that Act. This Release, Waiver and Indemnity Agreement shall be governed and construed by the laws of the Commonwealth of Virginia, regardless of where any injury or loss shall occur. In the event that any portion of this Release, Waiver and Indemnity Agreement shall be declared unenforceable, such declaration shall not affect the remaining terms of this document, which shall survive intact.


Signature ____________________________________________ Date:_____________
signature* ___________________________________________ Date:_____________
(Rider's Parent or Guardian*)
Printed name: __________________________________
Printed name*:______________________________
*Parent or guardian must sign in addition to rider under eighteen years of age

Ok, my comments. As a legal professional I can see the usefulness of this waiver, but who will be reading it and signing it? Who will be deciding if its clear and informative? I got bored after the first paragraph. I know that’s sad, but is a jury going to think the plaintiff read or understood any of this? This is written by a lawyer for a lawyer, but who has to understand it in the middle? The person waiving their rights! They wont understand this and it’s a risk that a jury wont believe they did either.

Next the font is not great. The parts that should be bold and large are small and the parts that should be small are all so large that they become a blur of unintelligible words. This waiver was well thought out and carefully executed, but some of the basic rules are backwards. I actually cannot tell if the waiver releases Farm from all suits by plaintiff’s entourage of hears, assigns ect because I simply cannot force myself to wade through the all cap font.
Now, I like that the VA statute, knowing its in VA, points out the possible ways in which a person might contribute to their own injuries. I’d play that up. I’d add more. That’s you key to winning a VA suit—strict contributory negligence so harsh that watching re-runs of Black Beauty might cross that line.
Please be aware that plain English is not a bad thing. After each clause, which you should understand if you are going to risk your future on a contract, its Ok to just say “Hey, I love my horses and I want you to love them too, but if you ride here you have to promise not to sue me. If you don’t want to do that then I am sorry, you are not welcome here.

In this world were anything over 200 words is considered boring you have to make sure eyes have not blurred and brains have not shut down after the second paragraph. I push past that with every post. I would do much better to post fewer words and more pictures, but this is a legal blog and if you cant handle words I cant help you. But when I draft a waiver or a contract I think about what a jury will be willing to read and how they will respond. Waivers have to be long, but they must be clear and understandable. The least clear and understandable thing on earth is a statue. Lawyers can argue for years about the damn things because its almost impossible to know what they say or mean. 10 judges will read the same statute and get to differing results. Adding the statutory language is always a good thing, but relying on it alone is legal suicide. It actually takes a Supreme Court to figure out what a statute means. Its my job to make it even more murky in court so my side wins.

Be VERY clear that the waiver must be “knowingly” signed. If they can’t understand it without a week to dissect it and seek independent legal counsel to sign it then you need some good old fashioned plain English. It may make the waiver longer, but it also helps the reader get to the end without losing interest.
A waiver with so many words (which again, I do not think is a bad thing) cannot be signed in a few minutes while getting ready to ride. It might be best to post your waivers on your website so people can read them and think about them for awhile before they show up at your farm saddle over arm and ready to ride.

This is a good waiver, but the font has to be corrected and it might be a good thing to test drive it out an a non horsey friend and ask then what it said and meant. Lawyers, judges and a JURY have to all agree it was clear and unambiguous and understandable.

Lastly, since VA does not recognize waiving negligence I might play up the assumption of the risk areas and rely less on the statue for protections. Once again, the statutes do nothing to prevent lawsuits for negligence so in reality they do nothing more then the common law has done for years but get your case kicked sooner if you were not negligent.

VA: First Read the Act

Statute in Full:
§ 3.1-796.130. Definitions

As used in this chapter, unless the context requires a different meaning:

"Engages in an equine activity" means (i) any person, whether mounted or unmounted, who rides, handles, trains, drives, assists in providing medical or therapeutic treatment of, or is a passenger upon an equine; (ii) any person who participates in an equine activity but does not necessarily ride, handle, train, drive, or ride as a passenger upon an equine; (iii) any person visiting, touring or utilizing an equine facility as part of an event or activity; or (iv) any person who assists a participant or equine activity sponsor or management in an equine activity. The term "engages in an equine activity" does not include being a spectator at an equine activity, except in cases where the spectator places himself in an unauthorized area and in immediate proximity to an equine or equine activity.

"Equine" means a horse, pony, mule, donkey, or hinny.

"Equine activity" means (i) equine shows, fairs, competitions, performances, or parades that involve any or all breeds of equines and any of the equine disciplines, including, but not limited to, dressage, hunter and jumper horse shows, grand prix jumping, three-day events, combined training, rodeos, driving, pulling, cutting, polo, steeple chasing, endurance trail riding and western games, and hunting; (ii) equine training or teaching activities; (iii) boarding equines; (iv) riding, inspecting, or evaluating an equine belonging to another whether or not the owner has received some monetary consideration or other thing of value for the use of the equine or is permitting a prospective purchaser of the equine to ride, inspect, or evaluate the equine; (v) rides, trips, hunts, or other equine activities of any type however informal or impromptu that are sponsored by an equine activity sponsor; (vi) conducting general hoofcare, including but not limited to placing or replacing horseshoes or hoof trimming of an equine; and (vii) providing or assisting in breeding or therapeutic veterinary treatment.

"Equine activity sponsor" means any person or his agent who, for profit or not for profit sponsors, organizes, or provides the facilities for an equine activity, including but not limited to pony clubs, 4-H clubs, hunt clubs, riding clubs, school- and college-sponsored classes and programs, therapeutic riding programs, and operators, instructors, and promoters of equine facilities, including but not limited to stables, clubhouses, ponyride strings, fairs, and arenas at which the activity is held.

"Equine professional" means a person or his agent engaged for compensation in (i) instructing a participant or renting to a participant an equine for the purpose of riding, driving, or being a passenger upon an equine or (ii) renting equipment or tack to a participant.

"Intrinsic dangers of equine activities" means those dangers or conditions that are an integral part of equine activities, including but not limited to, (i) the propensity of equines to behave in ways that may result in injury, harm, or death to persons on or around them; (ii) the unpredictability of an equine's reaction to such things as sounds, sudden movement, and unfamiliar objects, persons, or other animals; (iii) certain hazards such as surface and subsurface conditions; (iv) collisions with other animals or objects; and (v) the potential of a participant acting in a negligent manner that may contribute to injury to the participant or others, such as failing to maintain control over the equine or not acting within the participant's ability.

"Participant" means any person, whether amateur or professional, who engages in an equine activity, whether or not a fee is paid to participate in the equine activity.

Acts 1991, c. 358; Acts 2003, c. 876.
§ 3.1-796.131. Horse racing excluded

The provisions of this chapter shall not apply to horse racing, as that term is defined by § 59.1-365.

Acts 1991, c. 358.
§ 3.1-796.132. Liability limited; liability actions prohibited

A. Except as provided in § 3.1-796.133, an equine activity sponsor, an equine professional, or any other person, which shall include a corporation, partnership, or limited liability company, shall not be liable for an injury to or death of a participant resulting from the intrinsic dangers of equine activities and, except as provided in § 3.1-796.133, no participant nor any participant's parent, guardian, or representative shall have or make any claim against or recover from any equine activity sponsor, equine professional, or any other person for injury, loss, damage, or death of the participant resulting from any of the intrinsic dangers of equine activities.

B. Except as provided in § 3.1-796.133, no participant or parent or guardian of a participant who has knowingly executed a waiver of his rights to sue or agrees to assume all risks specifically enumerated under this subsection may maintain an action against or recover from an equine activity sponsor or an equine professional for an injury to or the death of a participant engaged in an equine activity. The waiver shall give notice to the participant of the intrinsic dangers of equine activities. The waiver shall remain valid unless expressly revoked in writing by the participant or parent or guardian of a minor.

Acts 1991, c. 358; Acts 2003, c. 876.
§ 3.1-796.133. Liability of equine activity sponsors, equine professionals

No provision of this chapter shall prevent or limit the liability of an equine activity sponsor or equine professional or any other person who:

1. Intentionally injures the participant;

2. Commits an act or omission that constitutes negligence for the safety of the participant and such act or omission caused the injury, unless such participant, parent or guardian has expressly assumed the risk causing the injury in accordance with subsection B of § 3.1-796.132; or

3. Knowingly provides faulty equipment or tack and such equipment or tack was faulty to the extent that it did cause the injury or death of the participant.

Notice the provision for "any other person" and see how this contrasts with the SC act. Any other person is not defined, but I would guess it means non-commercial establishments and private owners.

Notice Racing is excluded but not defined. Does this include training tracks and farms where horses are trained to race?

I have no idea what the difference between 132 and 133 means, but that's key to this act. We would need to look up some case law here to figure that out.

And once again spectators are free to sue you.

Lastly, notice the posting requirements for the signs. Where are they?

Friday, December 26, 2008

Next Up: Virginia

This space will have a waiver and comments for VA soon. The holidays are getting in the way of blogging, but of course all VA people will have looked up their state statute by now, right?

Tuesday, December 23, 2008

Time Out to Think About Liability

The object is to promote the good of society as a whole. That means protecting some from harm and protecting others from lawsuits. The trend is that the"others" are commercial establishments. Because business is good for society. Commerce is good for society.

Many non-commercial horse owners think they are covered when they may not be. Now go read your state's equine liability statute and see if it covers you? Some exclude racing establishments. Some exclude stallions.

Some states have strict liability which means if it happened you are at fault--no reasons or excuses allowed. Is your state like that?

And the nagging thing about spectators still bugs me. Last year I offered to help draft a plan to limit liability for a local horse related event. The best idea I could come up with was a ticket. On the back of the ticket is the assumption of the risk stuff. That's pretty common in concerts, baseball and other places people gather and may get hurt. If I were organizing any event where horses often run loose through the crowd--steeplechase, point to point, eventing, barrel racing (you-tube it). . .I would take the time to set up a gate and issue tickets.

Its is important to understand and customize each situation and I just can't say enough how much I worry about releases being passed around the internet from person to person and state to state. I actually think most of the time the lawyer drafting the release should come out and do a liability inspection because lets face it, we see liability all over!

If you rally cannot afford a lawyer then do your homework. Read the statutes. Read some recent cases. Look at many examples. Think it through. Lawyers win and lose cases based on where a comma is placed or just one word. Its that nit-picky.

If you knew or should have known is powerful stuff. You can't deliberately not know because you should have known. So how do you know what you should have known? What standards are applied?

Some of it is just custom. In a H/J barn you should have known helmets were mandatory. In a western barn they are not used at all. An up down lesson has different risks that something called a suicide race. Its all relative to what is customary and normal for your area and your sport. Do you teach Western and English lessons? How do you know when helmets are a must and when they are a maybe?

Look around. Do what the majority does. Do more is you want, but never be in the minority.

The SC release from Farm X


The Undersigned assumes the unavoidable risks inherent in all horse related activities, including but not limited to death, bodily injury and physical harm to horse, rider and spectator.

In consideration, therefore, for the privilege of riding, receiving instruction and/or working around horses at (Name of Farm), located at (address of farm), the Undersigned does herby agree to hold harmless and indemnify(Property Owner individual and LLC- property deeded to LLC), (Business Owner, individual and business names), (Barn Manager) their management, agents and employees of and from any liability, claims, demands or actions whatsoever arising out of or related to any loss, damage, theft, injury or death that may be sustained by the Undersigned or to the property of the Undersigned or to any family member or spectator accompanying the Undersigned while riding, receiving instruction and/or working around horses at X Farm.
By signing this agreement I signify that I have read and understand the contents.

________________________ _________________________
Signature Date

________________________ __________________________
Print Name Witness

Under South Carolina Law, an equine activity sponsor or equine professional is not liable for an injury to or the death of a participant in an equine activity, pursuant to Article 7, Chapter 9 of Title 47 Code of Laws of South Carolina, 1976.
I have read and understand the above Notice and Warning.
_____________________________ ___________________________
Signature Print Name

My comments: If this is a commercial venture the Equine Liability Act covers most of what this release leaves out. If it’s not a commercial farm then it needs to look pretty much like the statute but without the professional part. The statute wont cover anything implied if you are a private farm with guests riding.

I love that is has the proper form of a contract—therefore in consideration of—you promise to not sue and we have an implied duty to not give you reason to. A promise for a promise with consideration enforceable in a court of law. A contract. See my entries on contract if that’s all Greek to you. That’s why contracts came first. People forget this is a contract not to sue. Great job of including all the parties you might be sued.

Now, many states and SC in particular have a craving for conspicuous font EVERYTHING REALLY IMPORTANT should be in BOLD, LARGE and if POSSIBLE COLORFUL FONT. You can’t make it all large or it’s the same again, but RISKS, WARNINGS, I UNDERSTAND and AGREE and HAVE READ this should be BIGGER. The Equine liability act should be bold and often boxed.

I would also add all heirs, assigns and ect which will be seen in some future examples to bind everyone else with a possible claim too.

I am a stickler for outlining all the possible dangers of horses to bolster up the assumption of the risk. They bite kick, bolt, spook. Buck, refuse to jump blah blah blah. . . . . to get the knew or should have known in there. Remember, SC has comparative contributory negligence so plaintiffs have duties too.

I do not think the rider can release its friends and family. They need to sign their own waivers. I do not allow people to sign my rights way!

Lastly, I would add a line for parents of minors to sign. Both minor and parent should sign. In the future, why will be clear.

Lastly, I always add a clause that if any part of this contract is found void by law then the rest of the contract still stands. Look at any contract laying around your house. You’ll see that in there.

As written, would I take a case on contingency based on this release in SC if the injury was caused by negligence? Yes. I think I can break it. Here’s why, no conspicuous print, no plain clear English, no real warnings of the kinds of risks I am taking, no waiver of negligence and no coverage for damage to animals. I may lose, but depending on the facts of the case this would not scare me off. This would not discourage me from filing suit. That is the purpose of a waiver—one lawyer trying to scare some future unknown lawyer away. This would scare some lawyers away, but I would not take the case unless there was clear negligence and I can recognize negligence when I see it because of years of working with horses.

We still have the nagging problem of spectators. . . . . . . ..they are not covered under the statute and they are not signing releases. Liability. . everywhere. . . oh my!

Challenge to legal eagles. . with no other contract but his waiver, would you argue that he consideration for riding is the payment so the consideration in the contract of a privilege voids the contract?

More releases to come and they get longer and longer. When I started riding we saw a sign that said RIDE AT OWN RISK and signed a piece of paper even if we were 11. Times change.

First up, Barn X in SC

FIRST READ THE LAW: me in bold italics

Title 47. Animals, Livestock and Poultry. Chapter 9. Livestock Generally. Article 7. Equine Liability Immunity.

Citation: SC ST § 47-9-710 - 730

Citation: Code 1976 § 47-9-710 - 730

Summary: This South Carolina section provides that an equine activity sponsor or an equine professional right there. Bam! Professional. No payment no coverage. is not liable for an injury to or the death of a participant resulting from an inherent risk of equine activity. Liability is not limited by this statute where the equine professional knowingly provided faulty tack or equipment, failed to make reasonable and prudent efforts to determine the ability of the participant to engage safely in the equine activity, owns or otherwise is in lawful possession of the land or facilities upon which the participant sustained injuries because of a known, dangerous latent condition, or if he or she commits an act or omission that constitutes willful or wanton disregard for the safety of the participant or intentionally injures the participant. The statute also requires the visible displaying of warning signs that alert participants to the limitation of liability by law. Failure to comply with the requirements concerning warning signs and notices provided in this section prevents an equine activity sponsor or equine professional from invoking the privileges of immunity provided by this article. You must post those signs and they must meet the requirements.

Statute in Full:
§ 47-9-710. Definitions.
As used in this chapter:
(1) "Engages in an equine activity" means riding, training, providing, or assisting in providing medical treatment of, driving, or being a passenger upon an equine, mounted or unmounted, or a person assisting a participant or show management. It does not include being a spectator at an equine activity, except in cases where the spectator places himself in an unauthorized area and in immediate proximity to the equine activity. IT does not include spectators. Spectators rarely sign releases. Uh oh!
(2) "Equine" means a horse, pony, mule, donkey, or hinny.
(3) "Equine activity" means:
(a) an equine show, fair, competition, performance, or parade that involves a breed of equine and an equine discipline, including, but not limited to, dressage, hunter and jumper horse shows, grand prix jumping, three-day events, combined training, rodeos, driving, pulling, cutting, polo, steeplechasing, English and western performance riding, endurance trail riding and western games, and hunting;
(b) equine training or teaching activities, or both;
(c) boarding equines;
(d) riding, inspecting, or evaluating an equine belonging to another, whether the owner has received monetary consideration or another thing of value for the use of the equine or is permitting a prospective purchaser of the equine to ride, inspect, or evaluate the equine;
(e) a ride, trip, hunt, or other equine activity, however informal or impromptu, that is sponsored by an equine activity sponsor;
(f) placing or replacing a horseshoe on an equine;
(g) examining or administering medical treatment to an equine by a veterinarian.
(4) "Equine activity sponsor" means an individual, a group, a club, a partnership, or a corporation, whether the sponsor is operating for profit or nonprofit, which sponsors, organizes, or provides the facilities for an equine activity, including, but not limited to, a pony club, 4-H club, hunt club, riding club, school and college-sponsored class, program, and activity, therapeutic riding program, and an operator, instructor, and promoter of an equine facility, including, but not limited to, a stable, clubhouse, ponyride string, fair, and an arena at which the activity is held.
(5) "Equine professional" means a person engaged for compensation in:
(a) instructing a participant or renting to a participant an equine for the purpose of riding, driving, or being a passenger upon the equine;
(b) renting equipment or tack to a participant; or
(c) examining or administering medical treatment to an equine as a veterinarian.
(6) "Inherent risk of equine activity" means those dangers or conditions which are an integral part of equine activities, including, but not limited to:
(a) the propensity of an equine to behave in ways that may result in injury, harm, or death to a person on or around the equine;
(b) the unpredictability of an equine's reaction to sound, sudden movement, an unfamiliar object, a person, or another animal;
(c) certain hazards such as surface and subsurface conditions;
(d) collisions with other equines or objects; and
(e) the potential of a participant to act in a negligent manner that may contribute to injury to the participant or others, as failing to maintain control over the animal or not acting within the participant's ability.
(7) "Participant" means a person, amateur or professional, who engages in an equine activity, whether or not a fee is paid to participate in the equine activity. This is confusing but it applies to the rider—not the person using this to CTA. I run no type of equine business so if someone comes to ride my horses for free I am not covered.
HISTORY: 1993 Act No. 182, § 1, eff July 1, 1993, and applies only to causes of action arising on or after this act's effective date.
§ 47-9-720. Equine liability immunity; exceptions to grant of immunity.
(A) Except as provided in subsection (B), an equine activity sponsor or an equine professional is not liable for an injury to or the death of a participant resulting from an inherent risk of equine activity, and no participant or participant's representative may make a claim against, maintain an action against, or recover from an equine activity sponsor, or an equine professional, for injury, loss, damage, or death of the participant resulting from an inherent risk of equine activity.
(B) Nothing in subsection (A) prevents or limits the liability of an equine activity sponsor, or an equine professional, if the equine activity sponsor, or equine professional:
(1)(a) provided the equipment or tack and knew or should have known that the equipment or tack was faulty, and the equipment or tack was faulty to the extent that it caused the injury; or
(b) provided the equine and failed to make reasonable and prudent efforts to determine the ability of the participant to engage safely in the equine activity and to manage safely the particular equine based on the participant's representations of his ability;
(2) owns, leases, rents, or otherwise is in lawful possession and control of the land or facilities upon which the participant sustained injuries because of a dangerous latent condition which was known or should have been known to the equine activity sponsor, equine professional, or person and for which warning signs have not been conspicuously posted;
(3) committed an act or omission that constitutes wilful or wanton disregard for the safety of the participant and that act or omission caused the injury; or
(4) intentionally injured the participant.
(C) Nothing in subsection (A) prevents or limits the liability of an equine activity sponsor or an equine professional under liability provisions as set forth in the products liability laws.
(D) The provisions of this article shall not cover or apply to any liability arising from the ownership, maintenance, or use of any motor vehicle. WTF? What about the golf carts and vans parked on CC courses? Tractors? Hmmmmmm/
HISTORY: 1993 Act No. 182, § 1, eff July 1, 1993, and applies only to causes of action arising on or after this act's effective date.
§ 47-9-730. Warning signs; contract to contain warning notice; immunity revoked for failure to comply.
(A) An equine professional and an equine activity sponsor shall post and maintain signs which contain the warning notice specified in subsection (B). These signs must be placed in a clearly visible location on or near stables, corrals, or arenas where the equine professional or the equine activity sponsor conducts equine activities. The warning notice specified in subsection (B) must appear on the sign in black letters with each letter a minimum of one inch in height. A written contract entered into by an equine professional or by an equine activity sponsor to provide professional services, instruction, or rental of equipment, tack, or an equine to a participant, whether or not the contract involves equine activities on or off the location or site of the business of the equine professional or the equine activity sponsor, must contain in clearly readable print the warning notice specified in subsection (B).
(B) A sign and contract described in subsection (A) must contain the following warning notice:
Under South Carolina law, an equine activity sponsor or equine professional is not liable for an injury to or the death of a participant in an equine activity resulting from an inherent risk of equine activity, pursuant to Article 7, Chapter 9 of Title 47, Code of Laws of South Carolina, 1976.
(C) Failure to comply with the requirements concerning warning signs and notices provided in this section prevents an equine activity sponsor or equine professional from invoking the privileges of immunity provided by this article.
HISTORY: 1993 Act No. 182, § 1, eff July 1, 1993, and applies only to causes of action arising on or after this act's effective date.

Soon, Very very soon.

I am working on it. Please be patient. Go back to your holiday shopping and travel. The whole thing will be waiting for you after you finish your huge holiday meals and wash all the dishes.

Nothing in the law is black and white, it’s all shades of grey and reality changes with each court decision. I am trying to be very very careful in what I post and how I post it when it come to liability because so many people fear it and very few people feel comfortable with no clear answers—just areas of suggestion. Liability is like weather. Just prepare for the worst and then go on with your life.

Hence, I am trying to find, beg or borrow the most concise way to get the next section out without either scaring people or giving them a false sense of confidence. I also have to do an update check on the laws of several states. That will take all day. That is exactly why I hate the suggestion that a free or cheap initial consultation with an attorney can give you any useful information. Short story on that and then I promise its back to reading a dissertation (and I am not kidding—its an actual PhD dissertation) on new changes in equine liability laws and get to posting those releases:>

Perfectly good general practice lawyer with a well respected firm gets a call from a person who has a horse that no board has been paid on for several years. The horse had been part of a seizure for animal cruelty and it took many years to work through the courts. Perfectly good lawyer gives the standard answer—file for a stableman’s lien and take title to the horse. Perfectly good lawyer had no idea this horse and about 70 others had been part of an appeals process that went all the way to the state Supreme Court. SC had already ruled on exactly how the horses should be handled and how the bills should be paid. The usual answer was not the right answer in this case. Context and background facts always matter. Case law matters. Experience just gets you through those things faster, but in a profession where the reality changes weekly you have to do some work to give out the easy answer. Take anything you hear with a grain of salt and understand your mileage may vary.

So now I will do some more work.

Sunday, December 21, 2008

Liabilty Everywhere! Oh No!

From many of the comments I have received I think everybody is getting it! However, some are feeling they are suddenly surrounded by risks and liability. That’s normal. Its like med students suddenly self diagnosing with every disease they read about, you start to be aware and then you see liability everywhere! Do not panic. Nothing has changed, you are just more educated about your risks now.

Think about football. I sit and watch a football game and see some guy pick up the quarterback and slam him down on his head. The guy gets a 15 yard penalty. I am jumping up and down screaming that I just saw an assault and battery and a possible crime of attempted murder—all intentional and resulting a permanent injury to the quarterback--- and they do not come running in to sue or arrest anyone—they give him a 15 year penalty! But hey, that’s the game of football and anyone playing assumes the risks. The exact same behavior 1 hour later in the locker room would be a crime. On the field, it’s just a violation of the game rules. Keep context in mind and realize that there is a lot of assumption of risk if people are fully informed and accidents do not mean you will be found at fault. Deep breath. Relax. Calm happy place. Now I will scare the crap out of you some more!

Liability is not an individual game. An employer is liable for all actions of their employees while they are engaged in a work related duty. So you not only have to worry about your actions, but also those of all your employees. And let’s face it, if something happens not only will employer, employee and business get sued, but so will the land owner and any other parties who may be included in a corporate structure such as an LLC. The general rule is to sue everybody you can and see what sticks. The answer is insurance, insurance and more insurance.

While the deep pockets of the insurance companies may have something to do with increased lawsuits, do not be fooled. Those guys do not hand out cash unless they absolutely positively have to. They will pay a lawyer $30K to save $500 on a settlement. They have to. In most cases only the insurance companies can afford all that litigation. They need to stop any precedents that might allow larger settlements or extend the laws in ways that give the more exposure.

When you see case reported that has a written opinion, that means it has already reached the appeal stage. Most cases are settled. The first round courts rarely publish opinions. It is only after an appeal that a case becomes published with a written opinion. It’s just the very small tip of the iceberg and that’s were law is made. It’s hugely expensive and usually only an insurance company can afford that kind of litigation. Unless you are suing your insurance company (pretty common) those cases are in defense of YOUR interests—not the interests of the plaintiff’s attorneys. Really well funded insurance companies are out there every day fighting to keep a lid on claims and cases that make your job more risky. Its not you against the world. It’s the insurance companies against the plaintiffs’ lawyers. You are just along for the ride.

The main goal of the courts is not to favor one side over the other but to say what we as a society do and do not do. We like to think we do not let tortfeasers hurt innocent people and children without limits. And really, why would we? That rotten barn down the road where the kids ride unruly horses with no helmets with poor instruction should be closed down. There is no law against stupid. That’s what lawsuits are for. The barns get shut down because they are sued out of existence. Which is good for the honest, careful responsible people like you.

Train your horses. Train your staff. Train yourself. Be careful. Be careful enough that you do not have to feel you have harmed a person who trusted you to teach them and you will not make the kinds of mistakes that deserve civil punishment. Being really careful does take some of the fun out of horseplay. I know my riding when I was a kid was fraught with stupidity and negligence and would have been only half as fun if we had been under control. At summer camp we ran wild with the ponies and most of the time nobody had any idea where we were and whether we were galloping around with no tack playing pull the other person off the pony (pony jousting)or quietly napping in the bunkhouse. We had a blast. But kids got hurt. In my brief time as a kid in just those few months a year for 3 years I saw a girl get a horrible infection from ripping half the skin off her leg on an old rusty barbed wire fence. Of course we hid the infection so nobody would know we were riding all day in the woods unsupervised. She could have lost her leg. Then she did break her tail bone when they put her up on an unstarted colt to see what would happen. He stood up and dumped her. That’s what happened.

Then a young boy and his friend did what they saw us do and one of them died. That was not only horrible for the kid and his family, but it was pretty hard on the young girls who may have been responsible because we were the ones they wanted to be like. There was no excuse for that kid to die. He should have been supervised and never should have been allowed to disappear for hours. If you send your kid to camp you should have a right to expect someone is watching it and not letting it go off and play on wild ponies or swim by themselves. There is a duty. That duty was breached. The breach caused the damage. There is no amount of cash earth that can really make his parents whole again. Such behavior should be discouraged and no waiver should be found valid to make that OK.

Irresponsible fun behavior is still legal. But not on your horses when you are being paid to teach and train. Kids can have fun on their own time on their own ponies and that’s up to their parents, but when they are in your barn under your supervision and your duties don’t worry about being the meanie that stifles all the fun. I absolutely despised one of my first riding instructors as a full time working student, but not one of us got hurt in a whole year. Her horses, her barn, her rules. We got to run and jump and hunt and show and do all kinds of fun things, but we NEVER had the chance or the guts to do stupid things that would have been negligence. Not in her barn and not on her watch. She didn’t care if we hated her, she cared if we survived her. What I did on my own time on my own horse away from work was not her concern. But when you stepped into her barn you followed the RULES and you were never over-faced or overmounted. There were about 100 lessons a day for all levels of riders and not one injury in a whole year. And that includes the horses. Looking back I admire her, but I still don’t like her. But she took me from rough and tumble to an B pony club rating in one year and trained me to be qualified to care for Olympic level horses.

Now, if I get time I am going to go over some waivers kind and brave readers sent in for examples. They are not from my state so I have to actually look up the law in the states where they are from. That could take awhile, but check back often as I may get to one a day. And remember, this is just a basic primer on legal issues. I am not giving anyone legal advice and do not know the law in all states. This is just a quick run down on the basic principles of torts and its designed to educate so you can feel less lost and less fearful of what you do not understand. But you will be seeing liability all over for a few weeks:> A halter still attached to the wall but laying on the barn isle floor can still make the hair on the back of my neck stand up. Horse trap!!!!!! But just picking it up and making it a no no can make it all better.

But after reading about contracts and torts these many weeks, what exactly do you think a waiver is?

Thursday, December 18, 2008

31 Flavors of Defenses:>

Ok. So someone got hurt. Now you have hired me to defend you. The plaintiff has argued you had a duty, breached it, your breach caused the harm and the harm is permanent injury and they are asking for 5.6 million dollars. Instead of ignoring the lawsuit (which is why I have so much time to blog today—stupid stupid stupid as just a return phone call might see a painless and cashless settlement) you have hired me to find a way to get you out of trouble.

You were negligent. Not grossly negligent, but you turned your back on a beginner student to watch a fellow trainer jump a large course. You heard your student say she needed help, but you said “just one minute Honey, look up and keep your heels down” right before Honey landed in a thump at your feet. You are hoping the jury does not find you at fault, but you are not paying me to cross my fingers for you. You want a defense! And you very well might have some.

States differ in how they apportion blame. They have several choices of comparative ans contributory negligence to choose from and many different flavors of assumption of the risk covered in a nice sauce of wavers and releases law. The most draconian of all schemes is strict contributory negligence. In VA, at least last time I looked in 2006, SCN was still the law. That means that if the plaintiff is even 1% at fault the defendant is off the hook. Just that smidgeon of fault and you are free from a judgment. That’s sort of unfair, so juries usually do their own calculations to find a more rational balance, but being 100% free from contributing to you own injury is rare. VA makes up for this by not recognizing any form of waivers. You can’t change one bit of your potential liability by having someone sign away their rights. I guess they figure if they are going to be so strict on comparative negligence you don’t need any additional protections? So in a state like VA you want many pages of the potential risks so they are clearly informed and fewer pages of all the liability they waive since they aren’t waiving anything. Of course you need to check with a VA lawyer on this because it could change at any time. Its 400 years old and you never know when that radical forward thinking state might move into the 18th century. I am going to argue that Honey was partially at fault for riding horse in the first place and not following instructions. Its 10% her fault. See?

Now we move to South Carolina. Here we have comparative negligence with a 50/50 split. If plaintiff’s actions contributed 51% or more to the injuries they lose. Say your back was turned so you were negligent, but Honey had decided to practice trotting with eyes closed and went over a jump without permission. Could a jury see that as more then half her fault? Maybe. Certainly if Honey does the now famous Carolina standing on horse’s back move while you are tying your paddock boot. Its 30% your fault for taking your eyes off of Honey, but the trick riding caused the accident so there is either no causation or she is 70% responsible for her own injuries. You win. Waivers work better here, but you still can’t waive negligence. It is not public policy to encourage negligence by anyone that owns a pen. It is only public policy to discourage lawsuits for outright accidents.

The third common flavor is to let the plaintiff win, but reduce any judgment by the percentage of their own negligence. If they are 40% at fault and win $100K, they only collect $60K. Its nice to save $40K, but of course you still are out $60K and all your attorneys fees. No easy out by sharing the blame. This can be mixed with any kind of waiver scheme.

Next, there is assumption of the risk. Any waiver needs to have a clause that clearly states the danger of horseys and that the party willingly assumes the risks. In states with Equine Liability Acts that’s pretty much what the part you have to put in you releases says. Other examples of assumption of the risk is an eventer that is badly hurt. He cannot say he did not understand it was a risky sport. If he makes a claim that the risk had been changed unknown to him or the risks were now so high that it’s a suicide competition he might have a chance, but generally you do assume non-negligent risks when dealing with horses. Remember, part of the standard is did you know or should have known. If your cross county course has killed 5 people you should have known that is was too dangerous.

Lastly, you have to know which law is valid in your state in regard to whether a minor can sign a waiver or if their parents must sign. Counterintuitivly, the law sometimes does not allow the parent to assume the risks for the minor. In some states both the child and the parents must sign. The safest bet is to always have all parties sign.

Last time I checked there were 50 states. With so many differing schemes, each and every person hoping to limit liability needs to have a custom made release for their needs and purposes. Its just the cost of doing business. If you are negligent your release can help you some, but your insurance company doesn’t have to help you at all unless your policy covers negligence. Most do not. They cover you for the costs associated with the suits you will win due to no negligence on your part and that’s important, but many policies exclude negligence, most exclude gross negligence and all exclude intentional acts. So leaving that lame horse tied up hoping someone will steal it is not going to get you a big fat check. Nor will putting that big mouthed know it all PITA student on your bucking bronco to have a laugh and teach them some humility. No insurance or waiver or act of god will CYA if you do something on purpose.

There is no new surge of litigation and we have not turned onto a county of whinny suing babies. These laws date back centuries. You are more likely to get sued these days just because it is less socially frowned upon to assert your legal rights, but those rights have been around as long as the USA. What has changed is insurance. If you are insured you are going to have the money to pay for what you broke and people feel free to sue knowing it will not destroy and individual person they know. This also means lawyer will take cases on contingency so no out of pocket payments are needed. The lawyers have no interest in suing the uninsured assetless tortfeasor. In the end more people who have done some wrong have to pay for what they did, but more people who have done no wrong have to defend themselves when they have done nothing wrong. Baseless suits should be reported and those attorneys sanctioned, but nobody should be made to feel ashamed of asserting their legal rights.

This stuff is complicated and confusing. When I took Animal Law I sent my friend, an attorney, to the woman who taught the course. He came back with a completely new release and made a rider sign it before she mounted her already tacked up horse standing at the mounting block. The new release was that much different from the old one. In the following weeks all colts were gelded. They decided having colts on the farm was too risky. I do not know what happened in that meeting, but even an experienced lawyer learned so much in few hours he changed his whole outlook on liability and owning a horse farm.

So next, while I waste another day waiting for phone calls that will probably not come, I will look at some actual releases sent in by readers and apply all of the above to the facts of an imaginary case. I might be gone next week suing some bastards, but I did sit here for a week trying to mediate and negotiate. Sometimes you just have to get their attention and use the courts as intended because lawyers on salary do not have to save anyone’s time or money. Why talk to attorneys and work out problems when the tax payers will be happy to fund lawsuits? Taxpayers have lots of money and they don’t care how many hours they are billed!

When is a breach Negligence or Just bad Luck?

Now lets talk about how it is decided if you have breached your duty. We’ll get to the causation part later, but we need to keep these in small chunks because none of it is bright line tests that can be calculated with accuracy, its just what a judge or a jury might decide—even if they have never seen a horse. Its all based on the facts in your particular case and under the law in your particular state.

Lets start with a lesson on a school horse and a novice rider. What kinds of duties can you think of? I could see a duty to make sure they are as safe as possible, so that means a suitable mount, good, safe tack, constant vigilance by the instructor and setting the lesson time and place to avoid major known distractions. In addition, putting that student on a horse known to trip or duck out the ring gate could be a breach. If your neighbor, in an unprecedented move, decides to test out his new rocket launcher right when you have student trot for the first time and horse spooks then you might not have breached your duty. If your neighbor is like mine and he tests a new incendiary device or explosive on a daily basis then you should have known that was a risk and you may have breached your duty.

Some of the underlying principals are if you knew or should have known, if your actions fell below and accepted standard, and if you were responsible for whatever went wrong. If you knew or should have known means if your school horse has ever done X before you knew. If your school horse is new but you have no solid foundation for knowing that horse is bombproof and safe you should have known its possible it was not safe. If you check your tack daily and replace and worn parts and care for it well and it breaks, you have lived up to a prudent person standard. If you check your tack once a year and your girth has become frayed and breaks you failed. If you are responsible for the safety of a student and you decide to chat on the cell phone or leave that beginner student out in the ring to warm up alone while you go off to find a fresh cup of coffee you might be responsible. If you have done everything you can to be as safe as possible and Dobbin bucks for the first time ever and the brand new girth snaps while you are standing in the ring doing your job then you might not be liable for any negligence.

In order to prove you were not negligent you should have a standardized business approach that shows you do your job. For example, all tack is cleaned and checked very day after lessons. You have a system and it never varies. There is nobody who has ever been to your barn you can testify that you do not do this. Dirty unchecked tack would keep you awake and night and make you go clean it in your jammies at 3 am. That tack broke you had no way to prevent it and you should not have known with more diligence that it was about to go then you have an honest to god accident. Contrast that with an approach of you do what you can when you can or leave it to your novice students to check and clean tack that is meant to keep people safe. Or you clean it once a year whether it needs it or not. Then you have negligence.

As you can ascertain, the less you are in charge of the reason something went wrong the less of a duty you have. If student is riding her own horse how much a duty for suitability do you have? You did not pick the horse or make any promises as to its safety. Own horse own tack? Again, the burden for safety is shifting toward the student and away from you. Own horse, own tack own farm? Are you in the clear? Not really, you could still ask too much or set up a gymnastic designed to kill people, but your duties are just to your teaching and not to all the other possible things that could go wrong and may have been prevented with a little more foresight and care.

Nothing will protect you from negligent acts. The equine liability statutes will not protect you, waivers will not protect you and in many cases your insurance will not protect you. Negligence is bad and everyone is against it. The laws and statutes and insurance is there to protect you from accidents—things you should not have known about and could not foresee. None of it is there to give you cart blanche to run a sloppy, dangerous business. And deciding if it’s your fault lies in the in hands of non-horsefolk. They don’t know a gallop from a jog. They assume people don’t just fall off at a standstill unless someone is at fault. People in the movies and on TV don’t just fall off!

Here are some of the things that make me scream internally when I see them that may or may not be negligence. In a horse trails the rider walks the course to decide where and how to approach and get over obstacles. They have a plan. The have been diligent in scoping out where they must ride. The next day, at a high speed they come around a turn out of the woods to find a van parked in the approach area. The van was not there when the course was walked and they have been given no warning that people will be allowed to park on the course so close to the jumps. The rider has very little time to come up with a plan B and has to make a split second choice as to how to get to the jump now. They hesitate, the horse runs out and wipes out 2 jump judges, 3 spectators and the rider comes off and suffers permanent injury. Is negligent to allow the course to secretly change with no warning to the riders? Should someone have forseen that changing the course with no warning by placing large automobiles in the path of competitors might cause some harm? I could argue yes.

I school horse has become sick of beginners kicking and pulling randomly on it so it begins to buck off riders. Instructor decides that school horse is no longer suitable for beginners and moves horse up to intermediate riders because they are less likely to piss horse off and more likely to stay on when horse bucks. Intermediate rider is not told about horses bucking and gets bucked off and suffers injury. Negligence? Instructor knew horse bucked and tried to limit the risk by having horse buck less, but she knew or should have known it was an unacceptable risk. Reducing the number of bucked off riders from 10 to 3 does not mean one has been a model of safety and diligence.

Rider A attends clinic with Hellbent Guts, a famous 3 day eventer. Rider A has paid for and signed up for a Novice clinic. Guts tells rider A to gallop down a hill and jump a Preliminary jump. All other riders in the group have already done it. Rider A says he does not want to do that as it is above his and his horse’s level and he fears he may be hurt. Hellbent Guts humiliates and embarrasses rider A telling him no Guts no glory and maybe he is better off on a dime store plastic horse. Rider A relents and follows Guts’ instructions and slams head over heels in a rotational fall. Is Hellbent responsible for that fall? I would argue yes.

When I say I would argue yes, I do not mean I would write about my feelings on that situation. I mean I would haul that person into court and sue them on behalf of a client and argue to the jury that a duty existed, it was breached the breach caused the damage and my client needs to be made whole again and the wrong doer punished to discourage such events from happening again in the future. That’s my job. It’s also my right as a former instructor who did everything possible to prevent and avoid preventable and avoidable injuries.

Next we will discuss the many flavors of comparable negligence and assumption of the risk. The stuff the other side will argue to save your bacon after the fact.

Monday, December 15, 2008

Liability Wins! Courts and Torts 101

Liability is a hard topic to generalize about. Each state has their own codes of laws and their own case law. This is one of the major reasons each state has its own licensed lawyers. I never expect my readers to be here for 500 word or less feel good blurbs, but this topic is going to take some time and you need to understand the basics to get to the stuff you think is important. This could take weeks. If your time is that valuable, you an afford lawyers so you don’t need to figure things out for yourself. Clearly I am already anticipating boring you, but I figure of you want fast and funny there are 2,000,000,000 much better websites out there for you to read. When I am done, you will be an educated consumer of legal services. When the funny websites are done with you then you will have just had a really good time and be healthier and happier. O. Crap.

So anyway, liability for most lawsuits is what we call Torts. That’s where the big money is. That’s the litigation everyone fears and argues about. Unlike contracts law, torts law is designed to make you whole again and even to punish the wrong doer so they don’t do it to someone else. This means apportioning the blame and responsibility can be tricky and each state has ala carte menu to chose from that can make up several different combination of law. I am going to have to break this up over several posts because even the most fascinated and loyal reader is going to get bored unless I do. If you really wanted to know all this you would go to law school, but since you didn’t here is the free version of the $100,000K education.

Torts have elements. They are duty, breach, causation and damages. First you must have a duty—either a common law implied duty or a statutory duty. That means it is your responsibility to make sure someone else suffers no damages due to your action or inaction. You have no duty to strangers. You have no duty to be a good, helpful kind person. You can ignore a person bleeding in the street. You walking away from said bleeding person may actually be the reason they die, but its not your duty to help. You do have a duty to anyone who you invite onto your property or take money from for good or services or even some trespassers. You have a duty to not act in reckless and outrageously cruel ways. There is sort of an implied duty to do no harm, but no duty to help.

So when you walk a dog or board a horse or teach a lesson or let your friend ride at your farm you have assumed a duty. The duty is that you will act in the same way a reasonable person would and live up to your local and state standards of being careful and responsible. It means you will take reasonable precautions for safety, disclose what risks are known and not allow dangerous situations that may harm people to exist after you know about them. If you do not live up to your duties you have breached. Now you are halfway to getting sued.

Next is causation. Did your breach of your duty actually cause the damage? That’s a tricky one and that is ruled by past events in your courts' rulings. The scope of the causation can be limited and it has to be proven. There has to be a good story how your breach caused some injury, but like any good story the winning can be in the telling. Some cases rely on science and expert witnesses to make the connection. With most animal cases the causation in based on less objective standards. Had you not been doing X, would Y have occurred? 10 people take the stand and say ‘no’ and five people take the stand and say “yes”. Then someone decides which people seem more credible. That could be based on looks, fashion, tone of voice or any other non-scientific characteristic that makes them sound smarter then other witnesses. A white middle class male with an advanced degree can trump 3 women with the same degree. Causation is where most cases are won or lost.

Lastly, there are damages. Almost is not good enough. He could have X is not damages. You need actual damages that in most cases caused you some kind of economic harm. Even bodily injuries are translated into dollar amounts. Psychological damages do exist, but they have to be substantial and caused you to lose some money as in you can’t work or sleep or leave your house because of X’s actions. Lack on income or enjoyment are damages. So is lack of sex. If someone breaks your spouse's fun machine and you don’t get any that is damages. Sex is worth money, we all know that, but its only legal to charge for it in court.

That’s all for today. Just spend the day thinking of when you might be taking on a duty and when you might not be. Do you have a duty to tell that man in the 7-11 his shoe is untied? Do you have a duty to tell a boarder that the horse she is going to buy has reared and hurt people before? How might your actions today to people you do have a duty to have been breached even if nothing went wrong? Did a dog slip its collar but come right back? Did you accidentally leave a gate open? Did you put off fixing that broken fence for one ore day? Then fret for a few hours over all the ways your breach of a duty may have caused harm and how much $$ that harm could have been worth. What fun!

Saturday, December 13, 2008

Who Needs Courts in a World With Google?

I need to blog. I know I am wayyy behind in posting. I have had a crises situation handed over to me at the last minute, so I have been very busy researching researching researching!

One thing I learned this week is that it’s a brand new world. I can sit in bed and do more fact finding then any lawyer could with an entire staff 10 years ago. It’s all on-line. Not just the code of laws, the case law and the necessary forms but just about any evidence I need is already posted for me! These days everyone is a celebrity and they do not have PR people to tell them what to say.

People really need to SHUT UP sometimes or at least be aware that everything they have said or done online or on You-tube or on TV is still around. Don’t say blue today if you posted a video swearing yellow last year. Yellow is still there. I don’t need to hire a private investigator and sit down for hours of depositions. I can just watch you swearing with sincere conviction that the only truth is yellow from last year. Then you look like a liar, or crazy, or just not reliable to know the difference between blue and yellow at all.

It’s not the truth that hurts people. It’s not changing their minds or losing a good legal defense because of an admission that might have let them win, it’s the very fact of human nature that when someone thinks they are the center of attention their mouths open up and their brains shut down. Just pause and think if your natural inclination is poor recall of past events. I remember almost everything anyone ever says. It drives men and my mother crazy, but at least conversations were still in doubt. E-mails, film and internet posts prove what was really said. No defense of “I never said that!” How many times have you been there with a SO or family member?

So helpful HINT OF THE DAY: If a newscaster sticks a camera in your face don’t spew out anything you can think of to make your self look good without asking yourself if it matches what you said in the past. Don’t rely on the cameraperson to make sure your words match the background pictures. Don’t say one thing on Monday, contradict it on Tuesday and deny both on Wednesday if you did it all on film! WTF are you thinking? Do you not know we are watching and have You-tube 24/7?

And sadly, I am talking about the authorities in these cases, not even the accused. Cell phones, easy videos and You-tube are playing havoc in the Courts because Big Brother is not watching you, but everybody else and their brother is! I think it started with Rodney King? Then the tape of Mr. Fun Guy in the O.J. Simpson case. Did he not understand what tape is? In one case in Florida right now Authorities are saying they “had no idea” about conditions at a rescue, which we usually take for granted to be true. But in this case there is an actual documentary film made about the place. A film. A full length movie that they all saw and commented on a few years ago. But suddenly someone hit ALT-CONTROL-DELETE in their brains and they forgot it even existed? Waaa? Or do they forget our memories are now on-line for permanent storage?

I have used up my available time and my weekly quota of exclamation marks, but I want to put an offer out there to the 45 people who return frequently to see if I have bothered to post .

I can do maybe one topic this week. I am choosing between liability, the laws of agency, or the true cost of litigation. If any one of these topics is your first choice send me an e-mail. First one to respond wins. This is not a democracy. If you have a burning question that you think applies to other people too feel free to make a suggestion. I may not have time to thank you or respond, but I do read m e-mails. I will be getting to all these topics and more, but its readers choice which comes first! Oh look, I had one more exclamation point left:>

Friday, December 5, 2008

Contracts are just the begining: Its still gonna cost you

A contract, even a good contract, is still just a piece of paper. No contract will win a lawsuit for you. A contract is “an exchange of promises for valuable consideration enforceable in a court of law.” A good contract just increases your odds of winning a lawsuit, it does not replace one. This is where things get tricky and hard choices must be made. If you want to enforce that contract you slaved over to perfect, you will have to hire a lawyer or figure out if your contract is so self-explanatory that no judge could find against you--which is about as likely to happen as me actually posting daily.

As previously explained, contracts need to have certain elements in them to be valid. Once you have a valid contract and the other party does not perform, they breach the contract, but you still only have a piece of paper. Now you have to do the hard part which is figure out how to enforce that contract without ending up in the hole. Do you need a lawyer or not? Once again, it depends.

The field of Remedies is just as complicated as the field of contracts. If your contract does not state exactly what the remedy will be, called liquidated damages or, duh, remedies for breach, then you need to figure out what you want. That sounds simple, but its not. Let’s do a hypo, shall we?

Danny Jumpboy buys a horse that will be imported from the state of Oblivion to the State of Confusion. Danny goes to try the horse, has a PPE done and decides to buy horse and have it shipped back to Confusion. Horse needs to have a health certificate and an updated Cogins, so Danny writes a check and has the sellers sign an excellent contract that covers any possible eventuality. Danny has been dealing in horses for years so he has learned the hard way to put all kinds of stuff in his contract—if its happened to him or someone he knows its in there. Seller does not have horses registration papers but promises in the contract to send them along as soon as they arrive.

Danny goes home and awaits for horse to be delivered. I week later horse arrives sound and in good health. Great, thinks Danny, I am all set to train and re-sell horse. Danny starts training horse and in just a few months he has a good offer on it. Danny is thrilled .Buyer Vets horse and wants to pay 3 times what Danny paid for horse. But buyer wants the papers. Buyer only wants to buy a registered horse and Seller still hasn’t sent the papers. Danny calls Seller and demands the papers. Seller says she still doesn’t have them. Danny invokes THE CONTRACT and Seller says. . . So? Sue me. Now what does Danny do?

Danny has no idea what to do. He has this wonderful contract that was supposed to protect him. Seller should know she will lose in court and just fold! NOT FAIR! We can’t blame Danny for feeling this way. He did his job and had a good contract. He shouldn’t have to pay for a lawyer to enforce that contract. But Danny forgot one thing: a contract is an agreement enforceable by law. No court, no law. It’s a civil matter so there are no free enforcers hanging around at the other end of a 911 call.

Danny calls a lawyer. Lawyer tells him yes, the contract sounds good. What do you want? Danny doesn’t know what he wants. He wants JUSTICE, he wants FAIRNESS, he wants REVENGE! That’s nice says Lawyer, but what do you want me to do? How much money are you out? It’s a contract case. We are not here for justice or fairness or revenge. We are here to make you in the same position you would be if the contract had been completed. What difference do the papers make to the completion of the contract? And please write me a check for a $5,000 retainer.

Danny freaks. $5,000??!! $5,000?!! The horse is only worth $10,000 and he already has $3,000 into it in care and vet bills and shipping. Without the papers he can only sell it for $7,000 He’d be in the hole! Wasn’t this what a good contract was supposed to avoid? That depends. Does Danny need a lawyer and what does Danny really want the court to do?

Does Danny want to rescind the sale and get his money back? Does Danny want the papers? Does Danny want the money he lost on the sale due to no papers? Danny decides he just wants the papers. He checks out the limits on small claims court in Seller’s state. He calculates the filing fees and how much it will cost him to travel to Oblivion and spend the day there for court. He figures out it’s a lot less then $5,000. He just wants a judge to tell Seller to deliver papers or suffer some consequence for not doing so. If Danny’s contract is really good he may just decide to do that. Danny will have to read up on the court rules and find out how to serve Seller court papers, but Oblivion has all this info posted on a nice website. Danny decides to do it himself.

Danny files the complaint, has Seller served and awaits his court date. In the interim, Danny receives a letter and court papers from Sellers attorney saying the case should be dismissed for improper venue and lack of personal jurisdiction and a demurer and a rule 12(b)(6) motion. To which Danny properly responds. . WTF?! Danny has no idea what all this means or how to respond to it. He calls the court clerk and asks her. Sorry, she says, we cant give out legal advice. You need to hire a lawyer. So once again Danny is out shopping for a lawyer, this time in Oblivion, only to find out those lawyers charge even more and now they want a $10,000 retainer. What did Danny do wrong?

Danny didn’t do anything wrong. Its just unfair and expensive to assert your legal rights. You get every bit of justice you can pay for. If Danny had filed in a State where small claims courts do not allow lawyers he would have been fine with his wonderful contract. The contract would have made it much more likely then not he would prevail. If Danny had a claim in some other sort of law like Torts he may have been suing for enough money to get a lawyer who would work on contingency. But in a relatively small contracts case it’s not worth it for lawyers to work for a share of the winnings because the winning are the actual damages—what Danny is out. Even if Danny included attorneys fees in his contract he would only collect if he won—so how many lawyers will risk that gamble? Some. If I was looking at a very good contract I would. But not all lawyers would and not if the contract is less than solid or if the facts are less than obvious.

Danny has a good case and will probably win. However, he still needs to face a court and argue his case effectively. It can be done. Danny could have googled the terms in the answer and responded to them or learned enough to get he judge to decide, but Danny wasn’t aware of the basic truth about contracts—they are not written for either party, they are written to anticipate and frustrate opposing counsel’s arguments. It’s not what you do or do not mean in a contract that matters, it’s what small opportunity for weaseling out of he contract another lawyer will find that matters and how expensive it is to enforce it.

Danny might be completely in the right, but if he wants to enforce his contract he either has to spend considerable time learning or pay for a lawyer that already knows. On the bright side he needs to learn a whole lot less if his contract is good and he just needs to respond to a confusing motion or answer. On the less bright side there is no way for Danny to avoid this no matter how well his contract is written. Seller should have to perform and Seller should be ashamed, but its funny how people who cannot afford to complete their contractual obligations somehow manage to afford legal counsel when they breach.

Danny could get lucky and Seller hires no lawyer and the judge looks at the contract and orders seller to deliver papers. Danny could get lucky ad Judge sees through Sellers lawyers attempt to scare Danny off. Danny could get lucky and Seller immediately complies when faced with actual court papers. But none of this is really luck—it’s a consequence of Danny taking the time to have a contract that could win in court! Because that's the goal. A good contract may not avoid litigation, but it sure makes it more expensive for the person who should lose. It takes Sellers lawyer 10 times as many hours to find a weakness in Danny’s contract then Danny’s lawyer charges to simply show up in court an argue the contract. A good contract avoids litigation simply because there aren’t that many lawyers who can find fault with a rock solid agreement and those that can cost more then just settling.

So, the moral is?
1) figure out what you want and if it is under the small claims court limit in you state.
2) Figure out of litigation is really going to gain you anything but satisfaction.
3) Figure out if there is any other way to solve your problem besides court.
4) Figure out how to avoid any potential future snags by limiting the things that can go wrong and must be litigated to correct.
5) If your cost benefit analysis warrants hiring a lawyer then remember: That good contract is worth many many hours of your lawyers time. It wasn’t all for nothing, it means you should win in the end and be compensated for all your damages, including attorneys’ fees.

Monday, November 24, 2008

Contracts: Sales (and then I go back and edit posts)

Buyer Beware or Buyer Protected?

Most of us have bought or sold at least one horse in our lives. Many of us have bought or sold several, so we think we know what we are doing and our legal rights and obligations. The fact is, most of us have no idea what the law covers in this area, but times they are a changing.

A horse is a consumer good. Sounds shocking doesn’t it? The horse I want to sell is just like a toaster or car or large appliance? Yes, it is, and why shouldn’t it be? Buyer is giving you money for something you think is worth enough money to be sold. You sell—they buy. You are the seller and they are the consumer of a “product” If you sell more then a few horses a year you are not only a seller, but also a “merchant” and that opens up a whole other can of worms. So, lets pretend old Dobbin isn’t a draft X hunt horse. Lets pretend Old Dobbin is a refrigerator.

When you see an ad in the paper for a gleaming, shiny new refrigerator shown full of perishable goods on the bottom and frozen good on the top, you assume at least three things: 1) it is a refrigerator in the common use of that word 2) it will keep foods cold to an expected degree and 3) there is a freezer that will keep foods frozen. You probably also expect it is airtight, made of metal, and actually works. In addition, you would be disappointed if you took it home and it had faulty wiring that shorted out and shocked you or caused a fire that burned your house down. I think we can all agree that we have at least these simple expectations for a consumer purchase of a refrigerator.

If these expectations for your new fridge are not met, you immediately desire to return the faulty fridge and expect a full refund. You paid full price and spent your hard-earned money, so why wouldn’t you expect a refrigerator that worked like it should and wasn’t damaged or dangerous? You call the appliance dealer and ask for your right to return your “non-conforming” goods. The person tells you to read the sales contract you signed where its states clearly that this item is being sold “as is” and tough luck, buyer beware, and the item worked just fine when they had it. End if story? Of course not!

The very next day most of us would be frantically googling our state Representatives, State Consumer Protection laws, and calling everyone we know to find out how to GET OUR RIGHTS! “They can’t do that,” we’d opine. They just said sign here and I did! Or worse, the contract didn’t say “as is”—it just said you bought and they sold it. Or there is no contract at all! Just a receipt showing you bought a fridge from dealer X. You are angry. Hurt. Your food is rotting away in your kitchen. Then you call someone like me---a lawyer.

What do I do? I use the laws of the State of South Carolina to protect your consumer rights. Those laws do exist and someone fought hard to get them passed. South Carolina has some of the toughest Consumer Protection laws in the Country. In the end, you would get a new, working refrigerator or the money to buy one and I would get paid more then the darn thing costs in the first place. You would never buy a product from that seller again and eventually the seller would clean up his act or go out of business.

Is that what we expect to happen when we buy or sell a horse? No, its not. The game in horse sales seems to be played a little differently. You see an ad showing a nice Draft X jumping a 2.6” log on an open hillside with a child riding it. The ad describes Dobbin as a “well trained, quiet, field hunting, dressage, and show horse prospect.” Further, he is advertised as “sound, 16.1 and good for a family mount or perfect for a child moving up from ponies or for 4-H.” What does that say to you? To me it implies a reasonably quiet, well-trained, somewhat experienced horse that has been ridden by a child and can do the lower levels of the described disciplines now, or with a little training, soon after I buy him. So do I just scribble out a check, send it to the sellers and expect this perfect beast to be delivered just like a refrigerator? NOOOoooo!

Now the game starts. The seller tries to tell you the horse is just what you’re searching for and you spend considerable time, money, and effort to try and discover what’s really wrong with the horse. You go to look at him. You show up early to make sure he hasn’t been worked down or drugged. You bring a trainer, your best friend and any extra sets of eyes you can round up to find the hidden faults with Dobbin. You come back several times and even fork out hundreds of dollars to see inside Dobbin’s skin in case the undisclosed faults are hiding in there. Dobbin looks good. You can’t find anything wrong with him. You buy him and take him home. You sign a simple sales contract that says “Seller sells Dobbin to Buyer for $X as is”.
Hurray! Your search for that perfect horse for your teenage daughter is over. Dobbin arrives at your farm. Oh happy days. On day 2 you go out to feed in the morning and Dobbin is laying on the ground. Five hours later your Vet determines Dobbin must go to surgery for a bad impaction colic. Off to the Vet school Dobbin goes, your teenage daughter crying the whole way. You arrive at the clinic and three employees all run up and hug your new horse cooing “Dobbin! We haven’t seen you in months! Is him colicking again. Mmmm poor Dobsie” Yes, to put it mildly, Dobbin has a history of colic that you could not discover during all your pre-purchase antics. Did seller know this? Unless Dobbin had has own credit card and access to a truck and trailer, its pretty unlikely he gained his own nickname and the clinic without Seller noticing. Now what?

If you are like most of us you call seller up and complain she sold you a colicky horse and you want to give him back. “Sorry”, Seller says, buyer beware and you bought him ‘”as is”. “He’s fine,” she continues, “Those surgeries only keep him down for 4-5 months and he’ll be ready to ride by Opening Day. He always is” And what do you do? You whine, you yell, you bad mouth Seller all over town, you post “What would you do” messages all over the internet—but you never, ever consider calling a lawyer because, well, Dobbin is a Horse,—not a refrigerator!

And so you keep Dobbin, and the $4K Vet bills, and the monthly expenses for board and shoeing and special feed for Dobbins special tummy and you never, never find out if you had any legal rights. I’m here to tell you that you do. Seller has a legal duty to provide a product that does what it was expected to do. Seller has a legal duty to sell goods that last as long as they should last. Seller even has a legal duty to disclose known defects and if seller does not want to play by the rules, then Seller’s contract should be at least one full page long to disclaim all those implied warranties. The warranties are already there—the Seller must explicitly disclaim them, and lets face it, if someone handed you a full page of disclaimers, wouldn’t you pause long enough to read it and find out the meaning?

What did Seller promise Dobbin was fit and suitable to do? Well, from the picture you might have assumed he could stand up without falling back down in colicking pain. You would assume that a horse suitable for dressage, showing, hunting and riding was sound and healthy enough to do those things, maybe not go to the Olympics, but at least go to a schooling show or two. Dobbin was also advertised as being safe for a child, so there goes any behavioral aberrations like rearing, bucking, bolting, biting or spooking at every blade of grass. If Seller knew Dobbin was not up to these tasks, then the law will side with you. Proving what the Seller knew and when they knew it can be tricky, but in a clear cut case in a world that has google, its pretty hard to hide a horse’s history these days. Somebody out there knows Dobbin and is willing to share. Seller is also promising she actually owns Dobbin and has a right to sell him. You’d be surprised how many times this is not the case.

You intuitively know this when applied to a refrigerator, but until recently, it was hard for people to conceive that the same laws applied to horses. They do. Nobody is saying that if Newbie rider takes horse home, puts it behind barbed wire and rides it once a week Seller will be liable if the horse breaks down or gets injured, but Seller does have a duty to disclose all known defects and advertise honestly what the product they are selling can and can’t do. Nobody needs to put this in a contract—its already there by law when you buy the horse.

The time frame to assert your rights is limited. You must prove the horse came that way when you bought him, but an unseen infection, a long standing tendon injury, or an arthritic condition that can’t spring up over night or even over a few months is pretty unlikely to have happened after you bought the horse. If the horse jumped fine when sold and stopped a few months later, its not Seller’s problem, but if a horse has proved time and time again he will bolt at the sight of a jump, then selling that horse as a jumping prospect wont do. One must actually have some knowledge. Just because Dobbin broke every jump pole on your course (and even a few standards) doesn’t mean he is magically cured because Buyer somehow managed to pilot him around a course with no falls for the first time.

A sales contract that simply states “as is” is not a valid defense. The words are, as we lawyers call them, “terms of art” and must be written in a particular way and in a particular manner. Although 80% of your friends will tell you that ‘as is’ means you have no legal recourse, 80% of lawyers will tell you that’s not true. You have legal rights. Use them. Unlike refrigerators, even a free horse can cost thousands of dollars to keep. Nobody should have to pay hard earned money for a horse that isn’t, and never was suitable, just because they couldn’t find the hidden problems. The burden is on the seller, not the buyer!

So why doesn’t everyone know about these legal rights when applied to horse sales? I have no idea. I sure didn’t know before I went to law school and even many of my professors said the laws didn’t apply to animals. They do. But, because this misconception is so widespread, several states have started drafting and passing laws that specifically, obviously, and with big arrows pointing at the relevant sections, clearly outline the already existing laws and are written to cover exclusively the sales of horses. California, Kentucky and now Florida are considering or have already passed laws requiring full disclosure and other rules that must be followed in the sales of some horses—mostly expensive Thoroughbreds from high dollar auctions, but in South Carolina these laws already exist in our consumer protection legislation and in our Uniform Commercial code that applies to merchants. The law doesn’t care whether it’s the sale of a large appliance or a large animal like a horse. With the changing attitudes toward the buying and selling of horses effecting sales from coast to coast, now is the time to make sure you understand your rights. As either buyer or seller, and get professional contracts drawn up that clearly state what you expect the horse to be able to do, not do, and what remedies you expect for a breach such as paying your legal expenses and paying for the upkeep of a now useless, poor old Dobbin.

Contracts: Leases: Post now, edit later.

When do we need contracts? When you do anything that requires some performance by another it’s a good time to have a contract in writing. Situations where I see the most problems are contracts for selling a horse on consignment, any kind of lease arrangement, boarding contracts and partnerships, joint ventures or business arrangements. Some of these contracts can be done fairly well yourself if you do the right research, others should never be attempted without qualified legal help.

I make my living as a lawyer. I do not make my living giving out free advice, but times are changing and researching the law is not as hard as it used to be. I do not recommend just using someone else’s form contract or contract drawn up for them by their lawyer, but if you are willing to really put some time into the project you can draw up a fairly good contract yourself for some of the everyday things the average animal owner might need. They key is “willing to put in the time to research.” That might take several days or even a week, but it could save you a few hundred to even a few thousand dollars in legal fees.

Contracts from friends or posted on the internet can be a good place to start when drafting your own contract. They are not a good place to end, but the hardest part is knowing where to start. Having a good start right in front of you ready to be personalized and edited will make all the rest easier. Here are some of my helpful hints to DIY contracts.

Leases: If you are going to draw up a lease contact then do the research to understand what every term in that lease means. We are not talking about an entire legal education here, but look up each term on-line until you understand it and can clearly understand how it will affect your set of facts. You will not need to do this over and over again, you will just have to learn it really well once and then keep looking for new laws as you sign new leases. You should not sign anything you do not understand yourself.

Lease contracts are fairly standard in some ways and completely individual in others. After you have researched all the legal terms and their meanings that some person on a BB gave you, then do the extra research to see what kinds of problems people with leases have already experienced. That means searching for “lease gone wrong” threads instead of sample lease contracts threads. All contracts are good until something goes wrong. Learn what others wish they had put in their contracts as well as what others did put in there. In fact, spend more time learning how to avoid common mistakes or uncommon unforeseen occurrences.

Put everything in there you can think of that might possibly go wrong. You don’t have to go into great detail. You don’t have to cover yourself in the event a satellite breaks up in space and lands on your leased horse, but you should put something in there that covers all unplanned events whether its space debris or the death of the lessor. Or your death. Or the horse going lame halfway through the lease or the barn going under while you are contractually obligated to board there.

Who can ride the horse, who pays what bills under all circumstances, who makes major medical decisions, who pays what when and how much and how is the lease continued or ended should be in there. How the horse shall be used and what happens if its comes back in worse shape then when it left should be in there. Clearly stating who the legal owner is should be in there, but for some reason this gets left out so when leases end horses do not come back without a fight. Some leases might be even more specific like no 6 inch chain shanked bits or no sweet feed or barefoot trimmers or shoes on a barefoot trimmed horses. If it matters to you then put it in there.

In most cases, as I said before, a judge will assume if you took the time to write up a lease you put all the agreement in there. If you write up a lease and then run down the driveway shouting out additional instructions to the lessee, none of that will count as part of the lease. Nor will e-mails or statements in front of witnesses or a signed affidavit from the chief justice if the supreme court. Unless a lease term is so ambiguous as to be incomprehensible to a judge, no other evidence is allowed.

So now you have a lease agreement that 5 pages long! Yeah, so what? Shouldn’t a lease agreement for a horse be as long as agreement for an apartment or a car? Many leased horses are worth more then a leased car and board is more expensive then rent. If something goes horribly wrong with a car lease it does not haunt you for years that your car died or was ruined. It is your horse—its more then just a financial investment. Your lease may end up filling several pages, but its not like you can order new parts for a horse that comes back with a bad leg. You have to protect your investment and your horse. If he comes back broken you still have to pay board for the next 10 years. You should not feel guilty for making someone read and sign 3 pages of terms. Put it in there and if the person wont sign then they wont sign. Move on to someone who takes the lease as seriously as they do the terms and conditions of any other legal contact they enter into.

You should expect that the other party may want to negotiate their own terms too. Maybe they do not want to pay for mortality insurance and you both agree to change that term. Thats OK. Its Ok to have a two way conversation about your contracts. Its not OK to leave out terms because someone is too lazy to read 3 pages or every other contract you have seen for horses was shorter. The terms and conditions for me to use google blog are longer then any lease contract I have ever drafted. I did not hesitate the click “OK. I accept” because it was long. I just knew I had no choice and agreed. You and your other party do have choices in what your final agreement is, but the talking it out makes sure both sides have thought long and hard about signing a contract that may cost tens of thousands of dollars to fight out in court otherwise.

Here is a good test to know if you are willing to do the work to draft a good DIY lease. If you have not made it this far in the blog you are not a good candidate for taking the time and effort to make you lease worthwhile. And you quit so soon you do not even know it.

If you are still reading, and it takes me longer to write this stuff then for you to read it, the final thing you should do before using a pre-made lease that you have now fit to your facts is to look up a few examples of court cases in your state where a lease for a horse went bad. That will tell you where the law in your state varies from the law in the state you chain letter lease originated in. Case law is free and is found by googling or checking your state’s court websites. You look for the most recent case and see how a judge looked at similar facts. You do not have to be a lawyer to see how things played out and just what I have posted about contracts should get you enough basic understanding to figure out who won and who lost and why. The lawyers must know enough to come up with those legal arguments, you just need to read enough to understand if your state has any strange rules that were inconceivable to whomever wrote that original contract. If you can't find a case with a horse read one about any other non-real estate lease.

So, the 4 point plan is :
1) Get something to start with and know what you want.
2) Read it and research until you actually understand all the legal terms
3) Make it reflect the bargain you want in your lease
4) Check your states laws and cases to make sure the contract is valid in your state

I know it sounds like a lot of work. It is, but you wont have to redo it over and over again. You will change the terms for new leases or might add or subtract from past learning experiences, but its something you can build on and use over and over again for the one time effort of making it right. If its worth your money hire a lawyer, but this is one of those situations where the lawyer must understand about horses because cars do not learn bad habits on their own and apartments do not tend to disappear into the night only to reappear under a different name 4 years later.